Was your paycheck smaller than usual? Here's why...

Published 9:16 am, Friday, January 11, 2013

Chris Busch, partner in McClelland Samuel Fehnel and Busch, certified public accounting firm in Beaumont, and president of the Southeast Texas chapter of the Texas Society of CPAs through May 2013

Chris Busch, partner in McClelland Samuel Fehnel and Busch, certified public accounting firm in Beaumont, and president of the Southeast Texas chapter of the Texas Society of CPAs through May 2013

Was your paycheck smaller than usual? Here's why...

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The first paychecks of 2013 are likely to flow into people's bank accounts today, depending on your employer and your pay period, and wage earners can bank on one certainty - paychecks this year will be 2 percent lighter than they were last year.

That's because the "payroll tax holiday" is over and Social Security payments will rise by 2 percent to the full amount of 6.2 percent.

Several people commented on The Enterprise's Facebook page on Thursday, stating they had already noticed the reduction or had known it was coming.

The impact is tangible. For a person who earns $50,000 a year and who is paid every two weeks, the gross income is $1,923 per pay period. A 2 percent increase in Social Security taxes is equal to $38.46 per paycheck, said Chris Busch, a partner in the Beaumont accounting firm of McClelland Samuel Fehnel and Busch.

Social Security taxes on that gross pay of $1,923 per two-week pay period were $80.77 in 2012, he said. Because the payroll tax holiday expired on Dec. 31, the Social Security taxes are now $119.23, or an increase of 2 percent, he said.

That means for all 26 pay periods in 2013, the person who earns a gross pay of $50,000 will be paying $999.96 more than he or she did in 2012.